“Measure or measure not. There is no try.”
— My response to being called the Yoda of SaaS metrics.
Just a quick post to highlight my recent appearance on the Metrics That Measure Up podcast, hosted by Ray Rike, founder and CEO of RevOps^2, a firm focused on SaaS metrics and benchmarking.
Ray’s a great guy, passionate about metrics, unafraid of diving into the details, and the producer of a great metrics-focused podcast that has featured many quality guests including Bryon Deeter, Tom Reilly, David Appel, Elay Cohen, Mark Petruzzi / Paul Melchiorre, Sally Duby, Amy Volas, and M.R. Rangaswami.
In the episode, Ray and I discuss:
- Top SaaS metrics — e.g., annual recurring revenue (ARR), ARR growth, net dollar retention (NDR), net promoter score (NPS), employee NPS, and customer acquisition cost (CAC) ratio
- How metrics vary with scale
- Avoiding survivor bias, both in calculating churn rates and in comparisons to public comparison benchmarks (comps) [1]
- How different metrics impact the enterprise value to revenue (EV/R) multiple — and a quick place to examine those correlations (i.e., the Meritech comps microsite).
- Win rates and milestone vs. cohort analysis
- Segmenting metrics, such as CAC and LTV/CAC, and looking at sales CAC vs. marketing CAC.
- Blind adherence to metrics and benchmarks
- Consumption-based pricing (aka, usage-based pricing)
- Career advice for would-be founders
If you enjoy this episode I’m sure you’ll enjoy Ray’s whole podcast, which you can find here.
# # #
Notes
[1] Perhaps more availability bias (or, as Ray calls it, selection bias) than survivor bias, but either way, a bias to understand.
